Globalization and VPEC-T

Editor's Notes

1. Session One.
2. Session One.
3. Define what we mean by externalization For us architects a picture’s always better.. The access to information and communities on the Web by organizations and the people within them Collaboration with people and visibility of events (process state changes) outside the enterprise Ubiquitous Event visibility within the enterprise The use of external information and data processing services by people and corporate IT The opening-up of data from within corporate applications –for sharing within the enterprise and, selectively, beyond
4. Focus on the documents, conversations or messages that are produced and consumed by business activities. These are the dialogues we use to share a plan, a concept, a history and/or the details of a person, place or thing.
5. How we might think about business information when we put 'externalization' front of mind Information Containers And the Semantic Web The Container affects its content. Each type of container affects the information held within it. Information is only understood within the context of its container .
6. Outcome: Information Exhaust & Corporate Blindness
7. Externalisation: An approach re-shapes the Business Systems Container New Style Containers: Externalised Business Systems and Business Systems Infrastructure? A ‘closed openness’ starting from open? Dissolves the barriers between internal containers by adopting external information standards and technologies focused on the information rather than function … but to do this we need to think a little differently about how we describe the requirements of the businesses information system
8. Collaborative Composition (from User to Prosumer)
9. Notions of openness can be divided into those that focus on technological openness , those that focus on organizational/management openness , and those that focus on market openness .   Technological openness Allowing the use of components from various suppliers in the design and development of computer systems, using common standards to help achieve significant economic benefits. Includes portability , interconnection , interoperability and distributability . Organizational or  management openness Open-ended and incremental systems. Continual evolution and adaptation. Absence of barriers. Possibility of surprise. Market openness Level playing field. Low entry barriers. Low exit barriers. Technological openness The idea of technologically open systems is to allow the use of components from various suppliers in the design and development of computer systems, using common standards to help achieve significant economic benefits. Technological openness can be characterized in the following ways:   Portability The capability of implementing programs without change on different computer systems. Interconnection The ability to move information between computing systems using communications. Interoperability The ability of joint working between interconnected computing systems. Distributability Extends the interoperability idea to allow processes and information to be provided and migrated automatically to the most convenient point of an interconnected set of computing systems. Organizational / management openness Organizational/management openness can be characterized in the following ways:   Evolution The ability of an information system to be maintained to respond to changing requirements.  Software engineers such as Manny Lehman have encouraged us to consider the information system, across its operational life-cycle, as an evolving object. Unboundedness The absence of barriers to the provision of information and services for the end-user.  The ability of unexpected information, from unexpected sources, perhaps even in unexpected formats, to somehow enter the system. This relates to the notion of the open-ended incremental and continually evolving system discussed by Hewitt and de Jong. Business information systems have always been open, to some extent. Thus instead of a simplistic binary alternative - fully closed / fully open - it is more useful to consider a spectrum of degrees of openness, with full conformance to open system standards being positioned at (or at least towards) the fully open end of the spectrum. Market openness Market openness is often referred to as the 'level playing field'. It can be characterized in the following ways:   Low entry barriers The ability of new competitors to 'freely' enter a market. Low exit barriers The ability of competitors to 'freely' leave a market. Barriers to entry and exit are partly technological and partly socio-political. Of course, there are few if any markets where it would be appropriate or possible to altogether eliminate barriers to entry or exit. This is partly to do with the fact that operating in a market involves the acquisition of obligations .   
10. Multi-channel is often viewed as mostly a technology issue where gradual and unplanned introduction of new customer facing technologies has led to disparate solutions, business processes and supporting information data. The separate development of call center and eCommerce channels everywhere is a good example. We can see widespread evidence of the results from personal experience with different information and prices between one company’s call center and eCommerce site. Or manifestly different processes and charges between branch, ATM, and kiosk systems. But it can be helpful to scope multi-channel more broadly than purely technology channels because the same issues can occur in many different contexts. On this slide we suggest a number of channel types that all follow the same pattern of channel specific behaviors combined with common behaviors that cross channel and in many cases opportunities to enhance business models with cross channel coordination or switching. Developing a clear understanding of these for a specific enterprise of ecosystem is a prerequisite for effective architecture. The Delivery or Interface is always going to be the most obvious driver, usually driven by technology. However channel is also likely to be characterized by class of consumer or product class such as enterprise, SME, retail consumer etc. But channel thinking shouldn’t be restricted to enterprise systems, it’s also useful in government where citizen or intra government processes will exhibit all the same issues and opportunities. Business channel is obvious. In the Dell based case study this is clearly a major consideration, and Dell reported the business value of a specialized third party partner channel that achieved considerable pull through business by facilitating real time integration with partner bid and deal processes. Type of pricing mechanism is clearly another major source of complexity. Pricing is not usually regarded as a kind of “channel”, but it has a lot of the same structural characteristics. C onsider how much consideration is given when designing the support for the eCommerce channel to creating integration with other pricing mechanisms. Product delivery technology also has a big impact on channels. The current uptake of SaaS and On Demand services will inevitably be creating new demand for channel support systems. And of course the answer is that in the initial stages new management systems are developed for the new delivery systems, and only after the fact is consideration given to integration. This is particularly true of SaaS, and we can expect that enterprise uptake of SaaS will be cautious and slow until the SaaS delivery channel is properly integrated with service management, help desk and support and security systems.
11. In a recent interview, the chief executive of GE pointed out that in order to create propositions that their customers would value more than their competitors’ propositions, GE had to know more than their competitors about their customers’ needs. Suppliers can no longer just compete by providing the best product or best solution to a defined requirement. They must enter the customer’s world, and understand it as a context-of-use that conditions the nature of the demands that the customer makes. Suppliers are used to managing the risks associated with satisfying the forms of customer demand that they can predict. And suppliers expect their customers to define their requirements before committing to underwriting the risks they will carry in satisfying those requirements. In this way suppliers can maintain a symmetrical relationship between their capabilities and their clients’ demands. But now we are seeing the emergence of business situations where demand has to be acknowledged as asymmetric; this means that the customer is always wanting ‘more’ than the supplier can provide. This ‘more’ constitutes a value deficit that companies such as GE cannot afford to ignore. How much of this value deficit is going to be addressed by the supplier? This question has to involve balancing the risks and rewards on both sides of the relationship. How, then, to find this balance? To answer this question, new kinds of risk have to be considered on the demand-side in addition to those on the supply-side, and a wider understanding of the supply-demand relationship has to be established.
12. Value Stairs Source: Richard Veryard & Philip Boxer, Metropolis and SOA Governance. Microsoft Architecture Journal, July 2005 http://msdn.microsoft.com/en-us/library/aa480051.aspx Asymmetry arises at the edge of the organization, and means that the forms of demand are increasingly specific to the context in which they arise. The first asymmetry involves separating out technology from the supply of specific products. This requires modeling of possible behaviors that can be supported (so Microsoft or car manufacturing has to modularize itself in support of families of technology use). The second asymmetry requires separating out business models that can organize supply from the solutions that are on offer. This requires modelling of the possible forms of business geometry (so rail maintenance or retail services have to use a franchise model to allow the variation in business organization to accommodate the variety of ways in which the service needs to be implemented). And the third asymmetry requires separating out the different contexts of use. This requires modelling of the possible forms of demand within the contexts in which they arise (so that financial or care services are having to take up the way the through-time wealth/conditions are managed in a way that responds to different forms of context-of-use). The result is a stratification that describes six layers of organisation through which underlying technology is brought into relation with ultimate context-of-use:
13. The passenger consumes services produced by a system of systems – including airline, airport, immigration, mobile phone, financial, and so on. The interoperability between these services (how long does it take me to get to the gate, can I use my phone on the plane) critically affects both the usability of the services and the ultimate experience. As an initial simplification, we can draw a dotted blue line between outside/inside. However, as the stratification is elaborated, the separation between inside and outside may become more complicated.
14. How does this apply to IT? In the past, IT could think of itself as a supplier of systems to the business. Each system had an “owner” somewhere in the business. The IT portfolio typically reflected the organization structure, at least to some extent. Nowadays, IT is providing a complex set of business services, which can be thought of as a (conceptual) platform upon which various business collaborations can take place. (This is a broader notion of “platform” than the traditional notion.)
15. Another way of differentiating core and non-core is by knowledge intensity. In a later session, we will show how the core/non-core notions of business strategy links to the knowledge cycle. Reference: Amin & Cohendet, Architectures of Knowledge (Oxford University Press, 2004)